USDA’s Rural Energy for America Program (REAP) is funded and authorized for Fiscal Year 2026. However, grant applications are effectively in a holding pattern due to a backlog and policy shifts, with guaranteed loans still available.

2026 funding and authorization

• REAP remains an active Farm Bill program, with additional Inflation Reduction Act (IRA) money appropriated through at least 2027 and available for obligation through September 30, 2031
• The October 2024 REAP Notice of Funding Opportunity originally set three FY 2026 grant deadlines (September 30, 2025; December 31, 2025; and March 31, 2026), confirming that a 2026 funding round was planned.

Current application status for FY 2026

• USDA announced in June 2025 that it would pause accepting all REAP grant applications for FY 2026, delaying the July 1–September 30, 2025, grant window because of an overwhelming backlog of applications.
• USDA’s pause covers both IRA and regular Farm Bill grant dollars, with the agency stating it “anticipates” reopening FY 2026 applications on or after October 1, 2025. However, as of the latest USDA updates, there is still no revised, detailed FY 2026 grant guidance.

Loans vs. grants in 2026

• While grants are paused, USDA Rural Development continues to accept REAP loan guarantee applications year‑round through local offices, and those rules remain in effect for 2026 unless superseded by new guidance.
• Previously announced special terms (such as higher guarantee percentages) were tied to the FY 2025 policy. They may not carry forward unchanged into the eventual FY 2026 notice, so 2026 borrowers should expect updated loan and grant parameters once new guidance is issued.

Policy changes affecting 2026 solar projects

• USDA has publicly indicated it is implementing the Secretary’s direction to “disincentivize solar panels on productive farmland” in future REAP application windows, including FY 2026, which will likely tighten eligibility or scoring for ground‑mounted solar on prime ag land.
• Advocacy groups and technical assistance providers report that USDA has not yet clarified exactly how these priorities will be applied in FY 2026 scoring or eligibility, adding uncertainty for rural solar developers planning projects in that cycle.

Practical takeaway for 2026 planning

• For 2026 pipeline work, agricultural producers and rural small businesses can still move forward with projects now positioned for loan guarantees. Still, they will need to wait for USDA’s updated FY 2026 grant notice (expected after the backlog is worked down) before locking in any grant assumptions.
• Given the backlog, policy headwinds on specific solar projects, and the 2031 deadline for IRA funds, most advisors are steering clients toward conservative timelines and project structuring. Hence, they pencil with loan guarantees alone, treating any 2026–2027 REAP grant awards as upside rather than a base case.